When You're 60, Sick, and Trying To Get Good Healthcare Coverage.
At least that's what the CBO (Congressional Budget Office) says in the report it just issued on the AHCA, which is the acronym for the American Health Care Act, or 'Trumpcare' if we are to follow the Republican naming conventions. 'Trumpcare' is supposed to replace 'Obamacare', as Trump still insists on calling it. It was actually named the Affordable Care Act, which was one of the main focuses of the plan. We keep hearing that the new plan is going to be better, but what I wonder is, better for who?
Judge for yourself....
We finally have some numbers on what the Republicans’ proposed replacement for the Affordable Care Act is going to do to health insurance coverage and costs. The estimate, from the Congressional Budget Office, says that 24 million of us will lose coverage, and the rest of us will probably see our deductibles go up.
You can read the full report here. The CBO only looks at big picture questions, like what happens to the deficit and how many people will lose coverage each year. It’s not a crystal ball that can tell you what happens to the particular plan that you’re on now. But with this information, we can make some good guesses.
By the way, this bill is still very far away from becoming law, although Republicans in Congress are trying to hurry it along. It hasn’t yet had a vote by the full House of Representatives, and after that it would need to go to the Senate. President Trump would be able to veto it after that if he wanted to keep his campaign promises to “have coverage for everybody” and enact “no cuts to...Medicaid.”
This bill is also only the first stage of a three-point plan. Later, Congress will consider cutting essential benefits like maternity care, so insured people get even less for their money. But that’s all in the future—let’s look at the legislation that’s in front of Congress right now.
Will I Lose Insurance Coverage?
You might. If the bill is passed, 24 million people will lose coverage by 2026.
Right now, about 10 percent of people are uninsured. If the ACA stays in place, that number will hold steady. If the American Health Care Act replaces it, the total people uninsured in this country will go up to 19 percent. That’s even higher than pre-ACA numbers.
The CBO figures the people who lose coverage will include:
- 4 million people who stop buying insurance this year because the tax penalty won’t be enforced. If you currently only have insurance because you’re afraid of the penalty, this is you.
- 14 million people who would otherwise be eligible for Medicaid.These include a lot of low income adults in the 31 states that participated in the Medicaid expansion. Medicaid also provides care for kids, people with disabilities, and seniors in long term care. Medicaid cuts and caps begin in 2020.
- 2 million people (each year) who had a gap in coverage and would have to pay a 30 percent penalty for a year when they buy coverage again. The penalty makes people want to keep coverage when they have it, so an initial 1 million will avoid dropping coverage at first.
- Plus a bunch of people who say “no thanks” when premiums get too high. Older people face serious premium hikes; younger people won’t be as hard hit, but other changes mean insurance won’t be as good a deal for them.
A lot of the uninsured will be people who buy their insurance on the exchanges or who use Medicaid, but the CBO also estimates that some employers will stop offering insurance as a benefit—affecting perhaps 2 million people, who could still choose to buy a plan on their own. On the bright side, your employer might take the money they save and put it into different benefits or give you a small raise.
Will My Premiums Get More or Less Expensive?
First the one, then the other—if you’re young. For older folks, premiums will go up and up.
At first, premiums on the individual market will go up by 15 to 20 percent. With the tax penalty repealed, the young, healthy folks who choose to go without insurance won’t be paying into insurance plans. That means premiums have to go up for the people who stay.
By 2026, premiums will end up slightly cheaper, on average, than they would be if we continued under the ACA. (The CBO did not compare these to what premiums cost today, so it might still be more than what you’re currently paying.)
Currently, the ACA helps people buy insurance by paying part of your premium if you fall below a certain income level (400 percent of the federal poverty line, or about $24,000 this year). The amount of help you get is tied to your income level and to the cost of insurance in your area.But there’s a catch. Premiums will be cheaper because insurance will cover less. You’re not getting the same coverage for less money, you’re just getting less coverage. As we’ll see below, you’ll be on the hook for more costs through high deductibles and cost sharing.
The AHCA’s plan to help people afford insurance is to drop those and offer a tax credit that is larger for older people. But at the same time, they allow insurers to charge old folks five times as much as younger customers. The new tax credit barely makes a dent in those expected premiums.
Here’s an example: in 2026, under the ACA, a single person who makes $26,500 would pay $1,700 in premiums each year, no matter their age. Under the AHCA, if it passes, a 21-year-old would pay $1,450 (hey, not bad) but a 60-year-old would pay $14,600. That’s more than half of their very small income. If that person had a gap in coverage, the penalty would bring the total to 77 percent of their income, leaving just $6000 for everything else that person has to pay for in their life. Including their deductible.
Will My Deductible Still Be Sky-High?
Actually, it will probably get even worse. Right now, the cheapest insurance plans must cover at least 60 percent of their customers’ costs. Those are the “bronze” plans, and the other tiers cover more: 70 percent for silver, 80 for gold, 90 for platinum. If an insurer wants to participate in the Marketplace, it must offer a silver and a gold plan.
The AHCA takes away those requirements, so an insurer could decide to only offer low coverage plans. The CBO guesses that plans that cover less than bronze would be rare. It also estimates that plans that cover more than bronze will be rare, because those plans would attract sicker people that would rack up higher medical costs, so insurers might not be able to make them profitable.
High deductibles are a very simple way to make insurance cheaper (to entice people to buy it) but they also make insurance less helpful. If a plan only covers 60 percent of costs, on average, a lot of people will be maxing out their deductibles, and perhaps paying coinsurance and copays, too. The ACA currently provides subsidies for these “cost sharing” measures to certain low income folks. Those subsidies are going away, so the deductibles will sting even more.
Will I Still Be Able to Purchase Coverage If I Want It?
The good news is that the CBO sees the insurance market as stable—no “death spiral” resulting in the failure of the industry—under both the ACA and its replacement. So, insurance will still be around. A few employers will drop insurance as a benefit, as we mentioned, but you can still buy your own.
It may be harder to compare plans, though. Without the plan tiers, it will be harder to tell which plan is a better deal than another. And there will no longer be a requirement for plans to sell their insurance on the exchange websites like healthcare.gov, which was a handy one-stop shop.
Your choice of plans will probably change. There will probably be plenty of lower coverage plans available, which are the cheapest kind. But if you want to buy high coverage insurance (with, for example, small deductibles), there’s no guarantee that insurers will offer any.
You may also simply be unable to afford insurance if you are older, if you have a low income, or if you live in an area where insurance tends to be very expensive. The ACA’s subsidies helped in those situation, but those will be gone if the new law passes. You will, in a sense, have the “choice” to go without insurance or to buy a low coverage plan, but without a lot of cash you won’t really have a choice to buy insurance at all.